WHERE ARE PUBLICLY TRADED INDUSTRIAL SUBSECTORS VALUED? | Q3 2025 EV / EBITDA
Construction Services
Energy & Infrastructure
Environmental Services
Engineering & Consulting
Equipment Rental
LMM* Equivalent
LMM* Equivalent
LMM* Equivalent
LMM* Equivalent
LMM* Equivalent
5.8x 6.3x
13.2x 11.4x
8.6x 7.5x
6.0x 5.3x
8.3x 9.0x
Q3 2025 Q2 2025
9.2x 8.0x
11.9 10.7x
11.7x 9.1x
8.2x 6.4x
8.3x 7.5x
*Lower Middle Market; a discount has been applied to account for the smaller, less liquid nature of private companies.
Source: TKO Miller’s Proprietary Construction & Industrial Services Public Index
VALUATION DISCUSSION
TOPIC HIGHLIGHT Rising Materials Costs Test Construction’s Breaking Point
In Q3 2025, valuations for publicly traded industrial subsectors moved higher across the board. Construction Services saw the biggest jump, rising to 13.2x EV/EBITDA from 11.4x last quarter. Engineering & Consulting and Equipment Rental also gained strength at 11.9x and 11.7x, while Energy & Infrastructure held steady at 8.6x. Environmental Services was the only sector to dip slightly, down to 8.3x from 9.0x in Q2. Adjusted for the lower middle market, multiples remain lower, reflecting the size and liquidity discount for smaller private companies.
Construction input prices rose by 0.2% in August, driven largely by increases in iron and steel costs, according to a Producer Price Index (PPI) analysis by Associated Builders and Contractors. Over the past year, input costs are up 2.3% overall and 2.6% for nonresidential construction, despite some offsetting declines in oil and natural gas prices. Tariff hikes are amplifying volatility in material costs, prompting many contractors to report project delays, cancellations, or cost-sharing with suppliers. There’s growing concern that the market is approaching a breaking point where owners might put planned projects on hold due to cost pressures. Economists caution that persistent input inflation could weigh on construction spending even as demand remains strong. [LINK]
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